S+P 500 ISA?

wrenlegs

Hi there,
 
I want to invest some money in the S+P 500. My husband and I want to do this as easily as possible and ideally avoid paying tax on the interest. We are about to move some ISAs maturing end of March and it struck me that we could could get a stocks and shares isa instead of another cash isa with the view to it being invested in the S+P 500. 

Has anyone done this before? If so, who did you do it with and was it easy to set up? 

I’ve had a quick look online and see that Vanguard seem to suggest they do but it looks a bit complicated. Is there an easier contender or any other way of investing without taking a tax hit on the returns?

many thanks.

eskbanker

It always rings alarm bells for me when people decide on a specific investment (from a choice of tens of thousands) but seem unable to identify a suitable platform (from a choice of tens), so would strongly recommend spending more time researching investing, and in particular the risks of picking one specific market rather than diversifying more widely.  Investing rather than saving is a different mindset and shouldn't IMHO be driven by arbitrary timescales of product maturity or by a desire to avoid tax (other than to use wrappers where possible, i.e. using S&S ISAs is indeed generally advisable, although pensions may be better in some circumstances), but needs a considered view of objectives, timescales (long term), attitude to risk, etc.

Anyway, that's what I think, but to give a simpler answer to the question, there are a range of S&P500 trackers available at all main platforms such as Hargreaves Lansdown, Fidelity, AJBell, IWeb, II, Halifax, HSBC, CSD, etc, etc - Vanguard does have a platform but only offers their own products so many prefer the wider choice available at whole-of-market players.

Alistair31

Not sure any other platform will be any easier than Vanguard? What part are you finding complicated?

wrenlegs

Hi both, thanks for your replies. I’ve just been round in a circle with Vanguard and then the page I wanted to view to see how easy it would be to transfer a cash isa to S and S isa with them won’t load. Maybe I should have said annoying more than complicated.

Our cash isa interest is dropping it seems in the next tax year and so really we need to do something to up the interest. S and P is an index fund I’ve wanted to invest in for a while. My son is and over a year, his returns from it are eclipsing ours. I want to retain my ability to withdraw funds quickly if needed and to keep it tax wrapped. So an isa seems like the best option. We have other savings so this would be our only investment. 

ChesterDog

Be aware of the cycling of US vs Rest of World returns.

wrenlegs

Well, its food for thought, but essentially this is an isa we might only hold for a year and then transfer back to a cash isa. If it all goes boots up, then I’ll never invest again 🤣 But I’m hoping we will manage the returns that out son has - 12.5% the last year compared to our paltry 3.75% for our cash isa 😭

CheekyMikey

I think if you ask many people for one area to invest in for a year that might have the best chance of providing a double digit return then most would suggest either an S&P or a Nasdaq fund…there is of course some uncertainty coming for the US markets later this election year but my own view is that the US will still give you the best chance. Vanguard S&P 500 ETF (VUAG) or Invesco Nasdaq 100 ETF (EQQQ) would be my shouts. In terms of platform I’ve always found HL easy to use

JGB1955

Investing in shares should be for the long term - 5+ years.  Perhaps safer to put your cash in a fixed term ISA currently earning over 5%.  
Best 1 Year Fixed Rate ISAs | Rates Up To 5.25% (moneyfactscompare.co.uk)

Scrounger

wrenlegs said:

Hi there,
 
I want to invest some money in the S+P 500. My husband and I want to do this as easily as possible and ideally avoid paying tax on the interest. We are about to move some ISAs maturing end of March and it struck me that we could could get a stocks and shares isa instead of another cash isa with the view to it being invested in the S+P 500. 

Has anyone done this before? If so, who did you do it with and was it easy to set up? 

I’ve had a quick look online and see that Vanguard seem to suggest they do but it looks a bit complicated. Is there an easier contender or any other way of investing without taking a tax hit on the returns?

many thanks.

I've done several ISA transfers both from building societies and between platforms and found both HL and Fidelity in particular very straightforward and efficient.

Both currently have lucrative cashback deals on ISA transfers:

http://www.hl.co.uk/investment-services/isa/transfer-an-existing-isa

https://www.fidelity.co.uk/transfer/isa/

Platform fees for S&P500 ETF VAUG would be capped at £45pa for HL and £90pa for Fidelity.

http://www.hl.co.uk/shares/shares-search-results/v/vanguard-funds-plc-s-and-p-500-ucits-etf-usd

I hope this is helpful.


Scrounger

masonic

wrenlegs said:

Well, its food for thought, but essentially this is an isa we might only hold for a year and then transfer back to a cash isa. If it all goes boots up, then I’ll never invest again 🤣 But I’m hoping we will manage the returns that out son has - 12.5% the last year compared to our paltry 3.75% for our cash isa 😭

I'm not sure if you are joking or not, but you're pretty much bang on in describing the cautionary tale of how naive investors are often seduced into and then driven away from investing. There is a need to invest for the long term and stick with it, even if you are down 50% after a year (which is a possibility if investing in such a high risk manner as you describe). If you just try to hold for a year, then your chance of beating a savings account is barely better than 50:50.

Albermarle

wrenlegs said:

Well, its food for thought, but essentially this is an isa we might only hold for a year and then transfer back to a cash isa. If it all goes boots up, then I’ll never invest again 🤣 But I’m hoping we will manage the returns that out son has - 12.5% the last year compared to our paltry 3.75% for our cash isa 😭

There are hundreds of posts on this forum saying the same as below:

If you will need the money in < 5 years keep it in cash savings.
If you will not need the money for > 10 years , invest it .
If you are saving for retirement, invest via a pension.

It is very risky to invest 
Short term
To be 100% in equities 
To be 100% in one country

You are thinking of breaking every investment rule in the book. What you are thinking of is gambling, not investing. Like with all gambles you can win or lose......